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ICGN pressures White House on 'proxy access' and majority voting

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GLOBAL - The White House is being pressured not to implement a 5% ownership threshold and a two-year holding period for investors to nominate board directors on corporate proxies.

The International Corporate Governance Network (ICGN) - on behalf of its membership of global investors with a combined $9.5trn (€7.7trn) of assets - has written to president Barack Obama, congressman Barney Frank and senator Christopher Dodd, saying the proposals would be "extremely detrimental" to the attractiveness of the US market for overseas investors and represent a "backward step" for US corporate governance.

The ICGN added: "This ownership threshold is too high, in particular for larger companies, and the holding period is too long to provide effective access to management's proxy.

"We strongly encourage language that has a lower ownership threshold, such as 3% for all companies, and in particular with market caps greater than $10bn.

"Further, it is imperative this threshold be able to be met by multiple owners, not merely one owner."

The letter follows a previous one to the White House and Dodd regarding majority voting, which asked the US Congress to extend the basic fundamental obligation that requires a director that does not have a majority of votes cast to stand down from a board.

Last July, the network welcomed an initiative of the US Securities and Exchange Commission to allow shareholders to appoint directors to the boards of US companies, also known as 'proxy access'.

ICGN is a global membership organisation of around 500 institutional and private investors, corporations and advisors from 47 countries.